Automated Teller Machine (ATM) cards, credit cards and debits cards typically provide a safe and convenient method for an individual to access cash and purchase goods and/or services. To use an ATM card, for example, the individual typically opens a savings account, checking account, and the like, at a financial institution and deposit funds, which are then available for later withdrawal. To withdraw cash from the account, the individual (i.e., the account owner) typically goes to a conveniently located ATM or other similar machine and inserts the ATM card into the ATM, which may then read the account information stored on a magnetic stripe on the ATM card. The ATM may ask the account owner to enter a personal identification number (PIN) as a security precaution. The account owner may then specify an amount to be withdrawn. The ATM typically verifies the transaction by making sure the PIN is correct and that there are sufficient funds available to complete the transaction. Once the verification is complete, the ATM may dispense the cash to the account owner.
Debit cards may permit an individual to pay for goods and/or services with funds withdrawn directly from an account, such as a savings and/or checking account. Credit cards, on the other hand, may allow the individual to pay for goods and/or services using a line of credit. To use a debit card, the individual usually must open a savings account, checking account, and the like, at a financial institution and deposit funds. The individual (i.e., account owner) may then present the debit card at the point of sale. The debit card may be interfaced with a payment terminal, which may read account information stored on a magnetic stripe on the debit card. Similar to an ATM card, the account owner may be asked to enter a PIN. The payment terminal may then verify the transaction by making sure the PIN is correct and that there are sufficient funds available to complete the transaction. If the transaction is approved, the sale is completed and the funds may be withdrawn from the account.
ATM cards, debit cards, credit cards, and the like are often advantageous because such cards facilitate secure transactions by limiting unauthorized access to funds through the use of certain security features, such as a signature and/or PIN, and by minimizing the amount of cash that an individual must keep on hand. While cash is usually considered the most liquid type of asset, cash may also be the least secure because cash is typically freely transferable. The owner and possessor of cash is most often the same individual. Because cash is freely transferable, cash that is lost or stolen usually cannot be recovered. Therefore, the risks associated with cash transactions are often unacceptable, particularly with respect to transactions not conducted in person (e.g., by mail, over the internet, etc.) and/or involving large sums of money. ATM cards, debit cards and credit cards, on the other hand, often provide more security. For example, ATM cards enable an account owner to access cash when the account owner needs it. This usually minimizes the amount of cash that the account owner must withdraw and carry at any one time. Debit cards and credit cards, meanwhile, facilitate cashless transactions, which also may minimize the amount of cash that must be carried. In addition, such cards limit access to the funds available in the account by requiring that the account owner's identity be authenticated via a signature and/or PIN. These safeguards help to reduce the risk that cash will be lost and/or stolen.
Cash may have other disadvantages as well. For example, because cash is freely transferable, there may be little or no verifiable transaction history. It is often desirable for a payor (e.g., account owner) and/or payee (e.g., merchant) to have physical proof that a particular transaction took place. This typically requires that the payor receive a receipt. However, receipts may contain errors and can be easily misplaced. In contrast, a financial institution processing a debit card and/or credit card transaction will ordinarily create a transaction history, which may include the identity of the payee, the amount to be paid, the date of the payment, and the signature of the payor. This enables both the payor and payee to independently verify the accuracy of most transactions involving a payment by debit card and/or credit card.
While ATM cards, debit cards and credit cards may provide convenience and security, the proliferation of various types of cards in recent years has forced individuals to carry an ever increasing number of cards. For example, in addition to carrying an ATM card, debit card and credit card, an individual may also carry a driver's license, retailer cards (e.g., cards that provide consumer rewards and/or discounts on purchases at a specific retailer), health insurance cards, employee identification cards, video store cards, and the like. Furthermore, the individual may hold credit accounts with multiple credit card companies, each issuing its own specific card. The large number of cards typically means that individuals can no longer carry, much less keep track of, all the various cards. This has the potential to increase the risk that the cards will be lost and/or stolen. Worse yet, any loss may go undetected by the account owner. This, in turn, may increase the risk that the account owner will become a victim of fraud and/or identity theft.
In addition, a standard system for reading and authenticating card-based transactions has become well established. This is generally beneficial for card holders because it helps to ensure that the same credit card, for example, may be used to purchase a variety a goods and/or services, from a variety of sellers, at a variety of geographical locations. However, this standardization often poses challenges to improving the payment system because any changes may result in cost-prohibitive modifications to the existing card-based payment infrastructure. Thus, it would be advantageous to enable an individual to access multiple accounts without requiring the individual to carry a separate card for each individual account. Furthermore, it would be advantageous to enable convenient access to multiple accounts without requiring significant changes to the existing payment infrastructure.